Yes, its not all bad. ICE vehicle sales are collapsing and thus, EV sales growing under such conditions isn't easy. Also agree that the subsidy cuts have hurt Chinese EV sales growth. Interestingly, the figure for August of -22% growth YOY is split up into 0% growth for BEVs and a big drop in PHEV sales. I see PHEV ultimately disappearing too (more on this later!).
Btw, my little model looks like this (its got 50% global sales in the screen capture). I use the sale figures to adjust the model. This is purely for passenger EVs. Mine is higher than yours. 2018 had about 2 mil EVs sold and I was hoping for 3mil this year. We will see.
View attachment 1728756I don't agree. The current market is hurting purely because the EV sales per year are still rather low (2 mil in 2018) while the number of mines to open this year alone has been record breaking (Greenbushes increased output and sales by 500kt just in 2019, another 500kt from PLS/AJM, 150kt A40 + brines).
However as this base increases, the demand will rocket up much faster than supply. An EV sales growth rate of 40% dwarves the expected 10-20% supply expansion growth rate.
With respect to Morgan Stanley, this is the problem with their thesis, remembering that their thesis is LONG TERM oversupply. They justify this based on a 700kt LCE by 2025 figure which can be theoretically met by supply expansion (ignoring delays etc). The problems however are,
1) They claimed that demand would by 582kt LCE by 2025 not long ago only to revise up to 700kt LCE. This revision alone illustrates that they have been wrong on the demand side before (as have many others).
2) Most forecasts projecting 1000kt LCE by 2025 , at odds with MS.
3) The 700kt demand figure is broken down into a 410kt EV component which is comprehensively debunked in a great article by Rodney Hooper (seach for linkedin Lithium bears versus bulls. Can't link here). The argument is simple. Using MS own numbers of dividing that 410kt LCE amongst 10m BEVs and 9.5m PHEVs by 2025 they assume, gives an lithium battery content of 0.51kg/kWh which is roughly half of the accepted value. If they picked any realistic value (say 0.9) like everyone else, their projection would be near 1000kt LCE like everyone else.
4) MS assumption of a 50/50 split between BEVs and PHEVs is counter to the trends seen in sales where BEV is taking away market share from PHEV. It was a 70/30 split in 2018 and increasing. BEV have much larger batteries and lithium content.
So I don't think its quite as simple as you claim.
(20min delay)